Conventional wisdom says that the forecast is always wrong. Is that an excuse for demand planners to give up?
Even the most skilled forecasters won’t nail the precise amount of materials, capacity, product and distribution resources every time. Often they’re lucky if they come reasonably close. Nevertheless, there are reasons why the forecast is so often off the mark. Understanding them can help planners to improve their rate of accuracy. On this episode, we delve into the fundamentals of forecasting with Jonathon Karelse, founding partner of NorthFind Partners. He reveals what’s new in a discipline that, up to now, has seen little change over the previous 70 years. He lays out the pitfalls that planners should avoid, including the trap of unconscious bias, which can seriously skew a demand plan. And he discusses how companies can strike a balance between agility and long-term predictability. Hosted by Bob Bowman, managing editor of SupplyChainBrain.
Look for a new episode of the podcast, which can be downloaded or streamed, every Friday on the SupplyChainBrain website and iTunes.
An interview with Karelse about forecast value added (FVA).
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